FRC calls for sustainability assurance framework to address quality concerns
February 7, 2025
The Financial Reporting Council (FRC) has recommended the creation of a UK policy framework for sustainability assurance due to concerns over inconsistencies in the quality of assurance providers.
In its final report on the market for sustainability reporting assurance, which is an independent verification of sustainability disclosures, the FRC found that while the UK market for is functioning well, concerns remain over quality consistency as demand grows.
The report revealed companies prioritised assurance quality when selecting providers, considering factors such as their expertise, experience, size, global presence and reputation.
However, many stakeholders raised concerns about the assurance quality, highlighting significant inconsistencies in the credibility of assurance providers.
In addition, some companies felt the market lacked sufficient technical expertise, limiting their options due to quality concerns. Meanwhile others, despite having enough choice, struggled to assess the quality of assurance provided.
As a result, the FRC recommended establishing a UK policy framework for sustainability assurance that provides medium-term certainty for providers and reporters, supports investments and aligns with international frameworks where appropriate.
It also called for the creation of a unified regulatory regime that that combines standard-setting, oversight, enforcement, and market monitoring to ensure greater certainty for companies, providers, and investors.
Improving the calibre of available information on the quality of sustainability assurance to support how the assurance market function would also address concerns and support the market’s development, according to the FRC.
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Last Updated: 7 February 2025